STOCKS TO WATCH: eOn Communications, Gadzoox, SCO and SpeedFam-IPEC

eOn Communications should be active after it missed analysts' estimates in its fourth quarter, posting a loss of $1.4 million, or 11 cents a share, on sales of $10.7 million.

First Call Corp. consensus expected the maker of Linux communications servers and software to lose 10 cents a share in the quarter.

Its shares closed up 7/16, or 11 percent, to 4 3/8 ahead of the earnings report.

The $10.7 million in sales marks a 42 percent decline from the year-ago quarter when it earned $1.3 million, or 15 cents a share, on sales of $15.2 million.

"Our fourth quarter financial results reflect reduced demand for our Millennium digital switching platform and longer than anticipated sales cycles for our Linux-based eQueue and eNterprise communications systems," CEO David Lee said in a prepared release. "The Millennium competes primarily in the PBX marketplace, which has declined faster than we anticipated."

For the fiscal year, it lost $3 million, or 30 cents a share, on sales of $50.4 million, compared to a profit of $2.1 million, or 33 cents a share, on sales of $42.4 million in fiscal 1999.

Gadzoox will be hopping Friday after warning that its second-quarter sales will be 15 percent to 25 percent lower than the $9 million most analysts were expecting.

It also said it will provide a one-time reserve of between $9 million and $11 million for production cancellation penalties and excess inventory that was manufactured in reliance on the company's earlier internal forecasts.

Its shares closed up 3/16 to 10 5/16 ahead of the news before slipping as low as 7 in after-hours trading.

Company officials said part of the shortfall is due to sluggish sales of its new Capellix family of switches.

"We are in a transition period, and the new executive team is taking the necessary steps to market and support Capellix," said CEO Michael Parides in a prepared release. "We believe that we have all the ingredients to execute, and I am confident in our ability to deliver on our current plans."

Gadzoox missed analysts' estimates in its first quarter, posting a loss of $9.4 million, or 35 cents a share, on sales of $9 million.

Santa Cruz Operation will be worth watching Friday after it said will report a one-time charge ranging between $5 million and $6 million in its fourth quarter to pay for 190 job cuts.

The moves come ahead of the planned sale of SCO's services and server software units to Caldera (Nasdaq: CALD).

"This reduction will lower expenses to better reflect SCO's recent performance in our server software and professional services divisions," said CEO Doug Michels. "Moreover, we have worked closely with Caldera to ensure that these actions produce staffing results consistent with its future, post-acquisition business model."

SCO following the sale will consist solely of its Tarantella division, whose technology provides Internet capability for applications.

Its shares closed up 1/4 to 4 7/32 ahead of the news.

The chip-equipment maker figures to slide Friday after announcing it expects to post a loss of between 23 cents to 27 cents a share in its first quarter.

The company cited delivery delays for a number of tools, as two key customers requested time-intensive modifications to incorporate advances from its newest chemical mechanical planarization product.

First Call Corp. consensus expected it to earn 12 cents a share in the quarter.

It's now expecting total sales of $75 million in the quarter.

SpeedFam-IPEC shares closed off 3/8 to 16 1/16 ahead of the profit warning.